Is SEALSQ (LAES) a good penny stock to buy and hold?

The SEALSQ (NASDAQ: LAES) stock price staged a strong recovery this week after the company unveiled SEALCOIN on Tuesday. The shares surged to a high of $3.50, the highest point since September 15th. They have soared by more than 194% from the lowest point in December. This rally gives the company a market cap of more than $33 million.

Why is SEALSQ shares surging?

SEALSQ, a subsidiary of WISeKey, has been one of the best-performing penny stocks this year. This rally started in November when the company announced strong financial results. Its revenue for the first nine months of the year surged by 20.4% to over $22.1 million.

It also boosted its forward guidance for its full year. The company believes that its annual revenue will be $30 million, up by 30% from the previous year. However, the management was quick to warn that the new year will be a transition one as it moves to new semiconductors. As such, it expects that its growth will resume in 2025.

The other main reason why the LAES stock price surged is that the management announced plans to launch SEALCOIN. SEALCOIN is a digital currency that will be focused on developing and selling semiconductors, PKI, and post-quantum technology. 

The company hopes that embracing cryptocurrency will help its installed base, which stands at over 1.6 billion semiconductors. As such, SEALCOIN will also be an Internet of Things (IoT)-focused cryptocurrency that will also be used in DeFi. In a statement, the founder of SEALSQ said:

“The usage of the Google Cloud for the deployment of SEALCOIN will accelerate the development of the SEALSQ platform altogether. In a groundbreaking development, SEALSQ is taking a significant step forward in the world of digital finance (DeFi) and IoT with its advanced cryptocurrency protocol, SEALCOIN.

Is LAES stock a good buy?

LAES chart by TradingView

I believe that SEALSQ is a highly speculative company, especially now that it has embraced the crypto industry. A key issue is how the company will ensure that the SEALCOIN token is not a security. Recently, the SEC has been cracking down on cryptocurrencies it sees as securities.

The other issue is that the crypto industry has become highly saturated with thousands of coins. As such, breaking out from the pack is not easy. Further, in most cases, things don’t always work out well when established companies transition to crypto. A good example of this is Bit Brother (BETS), a company that used to deal with teas in China.

Most importantly, there is a likelihood that the company pivoted to crypto as its business slows as the management warned. This could be a way for SEALSQ to boost its stock, which tumbled to a record low in 2023. Therefore, my view is that LAES is a highly speculative and will have regular pumps and dumps.